Abiola & Sons Bottling Company Nigeria Limited Vs First City Merchant Bank (2013)
LAWGLOBAL HUB Lead Judgment Report
I. T.MUHAMMAD, JSC
The 1st plaintiff at the Kwara State High Court of Justice, holden at Offa [trial court] is a limited liability company carrying on the business of manufacture of and dealers in all kinds of soft drinks. The 2nd plaintiff is also a limited liability company carrying on principally the business of building, civil and Electrical Contractors,Saw-Milling industry etc. The 1st defendant is also a limited liability company carrying on the business of banking while the 2nd defendant is a Chartered Accountant. The 3rd defendant, as its name suggests, is a limited liability company incorporated to manufacture or brew 7-Up soft-drinks.
By a deed of debenture [which the plaintiffs termed ‘purported’], dated 27th November, 1986, between the plaintiffs and the 1st defendant, the sum of N3,5000,000 [Three Million, Five Hundred Thousand Naira] was advanced in the form of a term loan overdraft facilities to the 1st plaintiffs to meet their working capital requirement and finances toimport raw materials. As the plaintiffs defaulted in repaying the loan, the 1st defendant exercised its powers under clause 11 of the Deed of Debenture and appointed the 2nd defendant as a receiver/manager. In exercise of his powers as such, the 2nd defendant sold off some of the 1st plaintiffs assets to the 3rd defendants. Not happy with the sale the plaintiffs took out a writ of Summons on 01/07/91, claiming in paragraph 35 of their joint further amended Statement of Claim the following reliefs:
‘[i] A DECLARATION that the purported unstamped DEBENTURE DEED dated the 22nd day of November, 1986 between the 1st and 2nd Plaintiffs as the company AND the 1st Defendant as’ the bank’ is meaningless, worthless, unenforceable, illegal, null and void and of no effect whatsoever,
[ii] A DECLARATION that the appointment by the 1st Defendant of the 2nd Defendant as a RECEIVER/MANAGER pursuant to the unstamped DEBENTURE DEEDS dated 27th November, 1986 to take over the physical control and sell off all the assets of the Plaintiffs etc, was/is premature, hasty,illegal, null and void and of no effect whatsoever,
[iii] A DECLARATION that even if the unstamped DEBENTURE DEED dated 27th day of November, 1986 is irregular, the 1st Defendant cannot appoint any DEBENTURE DEED to sell off the Plaintiffs assets or properties without giving adequate notices to each of the plaintiffs and that the appointment by the 1st Defendant of the 2nd Defendant to sell off the plaintiffs assets/properties without any notice at all being given to the 2nd plaintiff before, during or after the said appointment is irregular, illegal,null and void and of no effect whatsoever;
[IV] A DECLARATION that the sale of the 1st Plaintiff’s properties situate, lying and being at ASA DAM ROAD, ILORIN and covered by Certificate of Occupancy No. KW3065 and registered as No.6 at page 6 in volume viii [Certificate of Occupancy] of the Land registry at llorin to the 3rd defendant is dishonest, suspicious, illegal, null and void and of no effect whatsoever;
[v] A DECLARATION that the sale by the 2nd defendant to the 3rd defendant of the 1st plaintiffs aforementioned properties is in flagrant violation of the provisions of the AUCTIONEERS LAW [Cap. 10] Laws of Northern Nigeria applicable to Kwara State and is therefore null and void and of no effect whatsoever;
[vi] A DECLARATION that all the actions, steps and decisions taken so far by the 2nd defendant in respect of the assets of the plaintiffs under the purported stampeded DEBENTURE DEED dated 27th November,1986, without due reference or accounting to the Registrar of Companies of the Companies Registry at Lagos or at Abuja are irregular, arbitrary, dishonest,suspicious, illegal, null and void and no effect whatsoever;
[vii] A DECLARATION that the sale, alienation, transfer or lease of the 1st plaintiffs landed property situate, lying and being at ASADAM ROAD, ILORIN and covered by Certificate of Occupancy N0.KW3065 dated 16th May, 1979 by the 2nd defendant to the 3rd defendant without the prior consent[or any consent whatever] of the Military Governor of Kwara State is illegal,null and void and of no effect whatsoever;
[viii] A DECLARATION that the 1st defendant has no righ tor power to debit the 1st plaintiffs account for sundry and numerous expenses incurred by it or any of its agent in respect of or in connection with the sale of the 1st plaintiffs properties;
[ix] AN ORDER setting aside:
[a] The purported unstamped DEBENTURE DEED dated 27th November,1986 between the plaintiffs and the 1st defendant;
[b] The appointment by the 1st defendant of the 2nd defendant as a DEBENTURE DEED to take physical control of the assets and properties of the plaintiff mentioned in the said DEBENTURE DEED of the 2nd defendants letter of appointment [if any];
[c] The sale[s], transfer alienation etc, of the 1st plaintiffs properties or assets made by the 2nd defendant to the 3rd defendant.
[x] AN ORDER setting aside all interest rates excess of the prevailing banking interest rate as at 26th November, 1986 charged by the 1st defendant on the 1st plaintiffs account;
[xi] AN ORDER setting aside all debits made against the plaintiffs account by the 1st defendant in respect of all the or any of the expenses incurred by the 1st defendant or any of its agents pursuant to the sale of the 1st plaintiffs properties;
[xii] AN ORDER directing the defendants either jointly and/or severally to make full restitution of all the 1st plaintiffs assets and/or properties in the perfect and/or same conditions in which they were before the 2nd defendant purportedly transferred or sold them to the 3rd defendant;
[xiii] A sum of N1,872,000 [One million, eight hundred and seventy-two thousand naira] only per month being loss of minimum net profit/ income on the 1st plaintiffs properties and assets taken over by the defendants from the 3rd day of November, 1987 until the day judgment is delivered in this case and thereafter until the defendants deliver possession to the plaintiffs;
[xiv] A sum of N 10 million naira [Ten Million Naira] being damages for the illegal and arbitrary take-over of the plaintiffs properties by the defendants and the denial by the defendants of the plaintiffs right of access or entry to their premises;
[xv] AN ORDER of perpetual injunction restraining the defendants either jointly or severally or either by themselves, servants,agents or privies or through any person howsoever from further holding-on-to or seizing or asserting authority and control over any of the plaintiffsproperties covered by the purported unstamped DEBENTURE DEED dated 27th November, 1986′
In their joint further amended statement of defence the defendants counter-claimed as follows:
‘[1] Declaration that the plaintiffs claim concerning the management, dealing with disposal of the 1st plaintiffs property in the hands of the receiver/manager is a matter arising from the operation of the Company [sic] Act and the High Court of Justice of Kwara State lacks jurisdiction.
[2] An order striking out all the plaintiffs claim relating to the sale, transfer and disposal of the 1st plaintiffs property by the 2nd defendant/counter-claimer.
A declaration that the loan agreement and debenture deed entered into by the plaintiff and the 1st defendant/counter- claimer is valid,legal and binding on the parties’.
After full hearing, the learned trial judge granted the 1st plaintiff’s claims except the relief on sub-paragraph [ii], which was abandoned and struck out. In respect of the 2nd plaintiff, the learned trial judge declined to award anything as loss of profits/income as there was no claim for it by the 2nd plaintiff.
The learned trial judge dismissed the defendants counter claim in its entirety.Dissatisfied, the defendants appealed to the Court of Appeal, Ilorin Division [court below]. There was a preliminary objection filed by the plaintiffs/respondents at the court below. The preliminary objection was taken by way of motion on notice. It was moved accordingly. The court below over-ruled the objection. The court below then went into the merit of the appeal. It was however confronted with the issue of jurisdiction of the trial court that the subject matter of the plaintiffs action involved a civil cause or matter pertaining to the operation of the Companies and Allied Matters Act. The court below found merit in that issue which it resolved in favour of the defendants as appellants before it.
The court below added a rider In the following words:
‘Ordinarily this would have been the end of the matter. But then, this is not the Final Court. In the event that the Supreme Court finds that I am wrong in my view on the issue of jurisdiction they ought to have my views on the other issues canvassed so that a rehearing on them by this court would not be rendered necessary.’
The court below, per IKONGBE, JCA [as he then was but now late], went on to discuss extensively the remaining issues which he found in favour of the defendants/appellants and allowed the appeal by setting aside the decision of the trial court and dismissing the plaintiffs action in its entirety. Dissatisfied, the plaintiffs/respondents and now appellants appealed to this court. The defendants/appellants and now respondents also cross-appealed against the said judgment.
Briefs as usual were settled by the parties. In their brief, the appellants set out the following issues for determination:
‘[1] Whether in the circumstance if this case, the learned Justices of the Court of Appeal erred in law when they over-ruled the Respondents/Appellants preliminary objection in its entirety. [Grounds 1, 2 and 3].
[2] Whether having regard to the circumstances of this case, the learned Justices of the Court of Appeal erred in law when they held that the trial High court had/has no requisite jurisdiction to hear and determine the plaintiffs [now appellants] suit/claims vide Decree No. 60 of 1991. {Grounds 4 and 5].
[3] Whether the lower court of Appeal erred in law when it resolved the issue of validity or otherwise of the Deed of Debenture tendered as EXHIBIT 1 in favour of the appellants/respondents and whether the issue of validity or otherwise or EXHIBIT 1 was raised timeously. [Grounds 6,7, 8, and 9]
[4] Whether having regard to the circumstances of this case, PW1 can be classified and/or referred to as ‘A PERSON INTERESTED’ when he prepared EXHIBITS 34 and 36 respectively as held by the Court of Appeal. [Ground 16]
[5] Whether the Court of Appeal was right and proper inits decision when it held that: ‘The failure, if any by the 2nd defendant/appellant to register his instrument of appointment or to make the requisite returns did not relate back to adversely affect his otherwise valid appointment.'[Grounds 10 and 11]
[6] Whether the Court of Appeal rightly and properly considered the relevancy and/or applicability of the provisions of Auctioneers Law and Land Use Act in the circumstance of this case. [Grounds 12, 13, 14 and 15]
[7] Whether the judgment of the Court of Appeal is against the weight of evidence in the circumstances of this case. [Grounds 17]The appellants shall argue the issues in order in which they are arranged and/or seriatim’
From the respondents own side,although it is nowhere clearly stated, what I decipher from the arguments contained in part A of the brief is that the respondents adopted the issues formulated by the appellants. However, before discussing the issues, the learned counsel for the respondents raised a preliminary objection against the competence of some of the grounds of appeal filed by the appellants. I shall consider this preliminary objection firstly.
The respondents counsel pointed out that grounds numbers 7, 8, 11 and 17 are incompetent as these grounds raise issue of facts or at best issues of mixed law and facts for which no leave was sought and obtained before filing them in contravention of section 233[3] of the Constitution of the Federal Republic of Nigeria, 1999. Cases such as OFORKEREVS MADUIKE [2003] 5 NWLR [part 812] 166; OLUWOLE VS.LSDPC [1983] 5 SC 1 at page 2 and 3, were cited in support.
Further challenges are that no issues were formulated from grounds 11, 12 and 15 which are deemed abandoned and that arguments in respect thereof should be discountenanced.
Permit me my lords, to reproduce the grounds of appeal challenged by the respondents. They are as follows:
GROUND SEVEN
The lower Court of appeal erred in law and shunned its sacred duty when it held:
This is clear evidence that the question of the non-payment of stamp duties was not raised in the plaintiffs pleadings before the parties closed their cases. The plaintiff had the opportunity of raising it earlier in the proceedings, as evidenced by the fact of the application for particulars that I just referred to. I do not think that the learned judge had been fair to the defendants.
PARTICULARS OF ERROR
[a] It is clear that the question of non-payment of stamp duties was raised in the plaintiffs pleadings.
[b] The fact that the question of non-payment of stamp duties was raised in pleadings vide amendment of pleadings is immaterial.
[c] The trial court had been fair to the parties in this case as the defendants had also had ample opportunity to amend their pleadings.
[d] The issue of fairness raised by the lower court is highly unwarranted and is capable of prejudicing the lower courts decision against the appellants herein and this has occasioned miscarriage of justice against the appellant.
GROUND EIGHT
The learned justices of the lower court erred in law when they held that there was indeed evidence before the learned trial judge to convince any judge that stamp duties were paid on Exhibit 1.
PARTICULARS OF ERROR
[a] The findings of the trial court that no stamp duty was paid is a finding of fact which ought not to be disturbed by the lower court.
[b] There is nothing to show on the face of Exhibit 1 that stamp duty was paid on it and the trial court so found, albeit, rightly.
[c] The defendants, through DW2 confirmed that Exhibit 2 was not stamped as required by law on the ground that both plaintiffs are limited liability Companies.
[d] Even the appellants/respondents brief before the lower court,their counsel submitted to the effect that if the respondents/appellants hadstated in their pleadings at the appropriate time that exhibit 1 was unenforceable for alleged lack of stamping, they would have had the opportunity of tendering the certified copy to prove that it was duly stamped.
[e] The content of paragraph [d] above shows further that the appellants/respondents did not show or prove that exhibit 1 was stamp dutied.
[f] The wrong conclusion of the lower court has occasioned miscarriage of justice against the appellants herein.
GROUND ELEVEN
The lower court of appeal erred in law when it held that no notice was required for the enforcement of the Deed of Debenture and if notice was required it was duly given.
PARTICULARS OF ERROR
[a] The Deed of Debenture is in the nature of loan agreement andthis being so demand is required for its enforcement.
[b] The appellants/respondents did not give the requisite written demand notice to the respondents/appellants before enforcing the Deed of Debenture.
[c] No requisite demand notice was given to the 2nd respondent/appellant for the refund of the money loaned her before enforcing the Deed of Debenture.
[d] There is no modicum of evidence in this case that any demand notice was written or issued on the 2nd respondent/appellant.
[e] It has not been established that the 2nd respondent/appellant made any default in the payment of the advance made to it by the 1st appellant/respondent.
GROUND SEVENTEEN
The judgment of the lower court is against the weight of evidence’It is clear to me that the above grounds, especially grounds seven which questions the non-payment of stamp duties and its particulars; ground eight, ground eleven and its particulars and ground fifteen are grounds of mixed law and facts. The appellants did not show that they obtained the requisite leave before filing them. This certainly offends the provisions of section 233 [3] of the Constitution of the Federal Republic of Nigeria, 1999 [as amended]. This renders the grounds to be incompetent. They are accordingly struck out. All issues and arguments in respect thereof are also incompetent and are struck out and or discountenanced.See: OLUWOLE VS. LSDPC [supra]; OFORKERE VS. MADUIKE[supra]; In JOV VS.DOM [1999] 9 NWLR [part 620] 538 at page 541,this Court, per BELGORE, JSC, [as he then was] observed:
‘A party to an appeal that intends to raise a new issue or introduce a novel matter into an appeal must seek leave to do so…this is in order to avail the other side every opportunity to advert to that issue, but to contend that issue of law or the constitution can be raised at any time and do nothing more than to raise it in argument is like laying a disrupting ambush for the opponent. This is not the spirit of our practice of adjudication of holding the even balance.’
As against the submissions of learned counsel for the respondents, I have found as a fact that grounds of appeal Nos 11, 12 and 15 are properly covered by issues Nos. 5 and 6 of the appellants’ brief. Thus, in the final determination of the preliminary objection it is my findings that grounds 1 – 6, 9, 10, 12 – 14 and 16 are competent and can sustain the appeal.Grounds 7, 8, 11 and 17 are incompetent and struck out. The preliminary objection succeeds partially. This appeal shall be determined on issues Nos 1,2, 4, 5 and 6 as issues 3 and 7 are struck out for incompetence.
Issue No. 2 from the appellants brief of argument challenges the holding of the court below on trial courts jurisdiction to hear and determine the appellants suit/claim vide Decree No.60 of 1991.
It is to be observed that the issue of jurisdiction of the trial court was raised before the trial court and the trial court held inter alia as follows:
“I do agree in toto, with the learned counsel for the defence, Chief Adegboyega Awomolo, SAN, that the issue of jurisdiction to adjudicate on this matter has never been canvassed before or decided upon by this Court. What happened was that during the prosecution of the appeal from my ruling of the 10th day of July, 1992, before the Court of Appeal, sitting in Kaduna, the learned counsel for the defendants sought for and obtained leave of the Court of Appeal to argue additional ground of appeal bordering on the jurisdiction of this Court to adjudicate on this matter in the light of Decree No. 107 of 1993. Chief Wole Olanipekun, SAN, learned counsel for the plaintiffs has tendered a certified true copy for the decision of the Court of Appeal in the case No. CA/K/243/92, where that court in rounding off [sic] its decision stated per OPENE, JCA, as follows at page 38 thereof;
“I am also of the view that the present suit being a pending case before the commencement of Decree 107, it isnot affected by the said Decree.
This decision was anchored [sic]on the decision of the Court of Appeal in the same case that:
In view of the fact that Decree107 of the 1993 does not make any provision for the pending cases, it is deemed not to affect any pending case.
This decision was handed down by the Court of Appeal on the 8th day of December, 1994 and the defendants herein who were the appellants in that appeal have not appealed from it further to the Supreme Court in accordance with the evidence of the DW2.
By the principle of hierarchy of Courts, all Courts below the Court of Appeal are bound by its decision until otherwise set aside by the Supreme Court. The matter does not end there. The issue of jurisdiction on this matter whether before me or in the Court of Appeal has already been destructive litigated upon [sic] and has been destructive by determined [sic]. In the circumstance of this case, it will be in proper [sic] to seek to re litigate on the same issue either before this court or the Court of Apeal…………………………..
Since the case has been remitted back to me after the decision of the lordships in CA/K/243/92, the decision of their Lordship becomes my decision on the issue and I cannot alter it or its effect. Being the decision of the Court of Appeal, I am bound by it…….
In the light of the foregoing, I am of the firm view that this court has become functus officio and the parties are bound by the determination by the Court of Appeal, as far as the issue of competency of the Court to adjudicate on the cause of action herein is concerned. The defendants are therefore stopped from raising the issue of jurisdiction in this case by way of a counter claim.’
The first issue for determination raised by the appellants before the court below was whether the Kwara State High Court could exercise jurisdiction in respect of the plaintiffs claim. The court below after having reviewed the decision taken by the trial court, the submissions of learned counsel for the parties and the prevailing law, came to the following conclusions:
‘I think I see some force in the submissions of counsel for the appellants on the point in contention. None of the reasons given by learned counsel for the respondents for asserting the in applicability of the Order of 1993, is with all due respect to counsel, untenable. Counsel obviously had not read Decree 60 of 1991…..if he had read it he would have seen that the Decree contained four sections.
SC. 88/2005